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National Press Foundation SeminarNov 1, 2006 New York
Michael P. LambertExecutive DirectorDistance Education Training Council
Mike@detc.org
The Business of Higher Education:
Student enrollments grew from 483,000 in 2002 to
1.5 million in 2006
In 2004 alone, student growth was 34%
Average annual growth will be over 20% for each
year of this decade
The Distance Learning
(the above data does not include DETC data)
Total online school revenues grew 36% in 2005, to
over $7 Billion U.S.
By contrast, the online music market was only $1
billion in 2005
In 2001, online students were just 2% of the total
U.S. college students. Today, they are over 7%
cont.
cont.
Due to aggressive internet marketing, and the
availability of Title IV student aid since July 1,
2006, for-profit online schools will exceed over
50% growth rate in 2006.
Availability of Federal Student Loans and
Grants to online schools will likely result in
millions of new student enrollments in the
coming years
Growth at non-profit online
colleges is strong as well: 25%
growth in 2004 and 23% in 2005
2 out of 3 Universities now offer
online programs
As growth in classroom
colleges flattens, growth in online
learning will soar
cont
Total Institutions 100 in 7 countries
Total New Enrollments, 2005 850,000
Total Active Students, 2005 2,250,000
Avg. No. of Programs Offered 20 for Career; 12 for Degree
Avg. No. of Employees 37 Career; 70 Degree
Profile of Students in DETC
Career Courses Degree Programs
Av. Age 34 37
Employed: 81% 94%
High School Diploma 85% 99%
Male 47% 55%
Fees Paid by Employer 40% 38%
Top Academic Degree Programs in DETC
1. Bachelors in Business
2. Masters in Business
3. Bachelors in Criminal Justice
4. Masters in Information Systems
5. Health Care Administration
Top Career (non-degree)Programs in DETC1. Medical Transcription
2. High School Diploma
3. Child Care
4. Paralegal
5. Medical Billing and Coding
6. Bookkeeping
7. Personal Computer
8. Nutrition
Technological Features Used in DETC Schools
Offer Online Programs 70%
“Free” Phone for Students 96%
Enroll Online 95%
Uses Email for Services 98%
Use Phone to Contact Students 96%
Customer Satisfaction in DETC
RESPONDED “YES”
1. Did you achieve the goals you had? 95%
2. Would you recommend the school to a friend? 96%
3. Were you satisfied with your studies 96%
Responses from random surveys of students from EVERY DETC institution
• Moving content and courses online
• Moving tests/exams online
• Making content more interactive and engaging
–Streaming video and audio, simulations, interactive assessments
• Implementing communication tools
–Messaging and online meetings
• “Staying the course” with print/correspondence models
In Curricula Area, DETC Institutions Plan On--
Do you currently use or plan to purchase a commercial course/learning management system to deliver online courses to students?
Yes, 44%
No, 56%
DETC School Survey
•Positioning and differentiation
–From a niche market to a mass-market
•Marketing expenditures escalating
–20-30% annual increases among for-profit institutions
–+1-2 percentage points over revenue
•Supply and demand and competition from “traditional” institutions is driving up costs
•Media mix is shifting toward the Internet
•New channels and strategies are emerging
Marketing Shifts
Of the following marketing channels, which do you expect to focus more (i.e., budget, time) on in the next 2 years?
14%
16%
24%
25%
37%
37%
45%
51%
67%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Broadcast
Internet: Banner advertisements
Internet: Directory placement/listings
Internet: Direct e-mail marketing
Direct mail
Events
Employers, military, government
Print media
Internet: Search engines
DETC School Survey
Select 3 of the following elements of your institution's offering that you most emphasize in marketing to potential students
6%
12%
17%
33%
33%
37%
52%
54%
79%
0% 20% 40% 60% 80% 100%
Other
Technological innovation
Time to completion
Price/cost
Quality of learning outcomes
Customer/student service
Quality of faculty
Quality of content
Convenience and f lexibility over on-campus
DETC School Survey
•“Real school. Real degree.”
•Penn State Online (PSU World Campus)
•“E-learning with a tradition of excellence”
•Virginia Tech
•“Get your degree at warp speed – from a name you trust.”
•Kaplan University
•“Looking for a top-ranked degree that is also convenient? Earn your master’s online from one of America’s Best Colleges.”
•Drexel University
•“The nation’s leading online university”
•University of Phoenix Online
•“Accredited degrees – online, with the flexibility to fit your busy lifestyle”
•The University Alliance (Regis, St. Leo, Tulane, etc.)
Marketing Taglines
• Online or on campus, nationwide and around the world”
• Blended models and national/international network
• “The country’s only AAPT-accredited online program”
• Programmatic accreditation and niche uniqueness
• “Online education from your local university”
• Brand/locality
• “A quality online degree at a fraction of the cost”
• Price competition
• “The online degree rated #1 by manufacturing employers”
• Prospect of quality ratings and labor market outcomes
Potential, Future Marketing Taglines
Percentage of Students Supported/Reimbursed by Employers (in whole or in part)
22%
14%
12%
52%
0% 10% 20% 30% 40% 50% 60%
51%-100%
26%-50%
11%-25%
<10%
Extrapolated Mean = 20-25%
DETC School Survey
Future Programs in DETC (3-5 Years)
Advanced degrees and continuing education
Health sciences
Professional Doctorates, e.g., Doctor of Business Administration
Homeland security
Graduate degrees in education administration
Para-professional degrees, e.g., Physicians Assistant
Trends in the U.S. Market
More discriminating and selective consumers
Continued private investment
Blurring of traditional “boundaries” and segments:
– For-profit/non-profit
– Online/on-campus
Growing importance of employer relationships
Evolving and increasingly favorable regulatory environment
Productivity and service enhancements through technology
Content is becoming more flexible, dynamic, and interactive
Beginnings of stronger international push among U.S. institutions
Future Challenges
Competition and differentiation– Escalating competition in a growing market– Traditional institutions waking up to the opportunity– Increasing marketing costs, positioning in a noisy market
Staying technologically current Finding and retaining quality faculty Transfer of academic credits Regulatory compliance and quality assurance Diploma mills
DETC Internet Use
In which ways do students use the Internet to interact with your institution?
68%
74%
78%
86%
96%
0% 20% 40% 60% 80% 100%
Interacting with other students
Taking tests/exams
Accessing course materials
Accessing student services (e.g.,library, tuition payment, etc.)
Interacting with faculty
Note: “Check all that apply” – totals do not add to 100%
MEGA Trends for USA Distance Providers
More Competitors for the Same Student
Everything will be Online and Instant
Homogenous Learning Products and Services
More International Partnerships
Price is the Key Marketing Edge for DETC
Productivity and service enhancements through technology
Content is becoming more flexible, dynamic, and interactive
Beginnings of stronger international push among U.S. institutions
What Works In……MANAGEMENTand ADMINISTRATION
Annual Strategic Planning
Performance-Based Staff Accountability
Competitive Environment Awareness
Virtual Staff and Faculty Meetings
Comprehensive Outcomes Assessment System
What Works In……PROGRAMDEVELOPMENT
Custom (Docutech) Publishing
Ad Hoc Program Development Teams
Third Party Text Storage and Shipping
Partnerships With Reputable Online Institutions
Customizing LMS Templates
What Works In……Curriculum Strategies
Spin-Off Programs/Multiple Options for Majors
Combination Degree Programs: Health Care and Law
Degree Completion Programs (2+2 BS programs)
Pre-Matriculation Assessment for Aptitude for Distance Learning
Small (Virtual) Group Projects
What Works In……MARKETING
Bidding for Top Position on Internet Search Engines
Branding to “Stand Apart” from the crowd
Telephone Call after Literature is Received
Referrals from Current Students
Easy to Navigate Websites with Easy to Enroll Feature
What Works In……TURNING PROSPECTS INTO STUDENTS
Convenience of the Method
Accreditation and Acceptance by Institutions
Acceptance of the Degree by Employers
Price versus PERCEIVED Value of the Degree
Program Matches Career and Life Aspirations
What DOES NOT Work Today
Print-based Advertising
Mailed-In Enrollments
Voluminous, Printed Catalogs
Scripted, Motivational Email Messages
Slow Evaluation of Student Assignments
Lack of 24x7 Student Services Via Email
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